4 Stocks Spiking on Unusual Volume - views

DELAFIELD, Wis. (Stockpickr) -- Professional traders running mutual funds and hedge funds don't just look at a stock's price moves; they also track big changes in volume activity. Often when above-average volume moves into an equity, it precedes a large spike in volatility.

Major moves in volume can signal unusual activity, such as insider buying or selling -- or buying or selling by "superinvestors."

Unusual volume can also be a major signal that hedge funds and momentum traders are piling into a stock ahead of a catalyst. These types of traders like to get in well before a large spike, so it's always a smart move to monitor unusual volume. That said, remember to combine trend and price action with unusual volume. Put them all together to help you decipher the next big trend for any stock.

Amag Pharmaceuticals (AMAG) is a specialty pharmaceutical company focused on the development and commercialization of Feraheme injection for IV use to treat iron deficiency anemia. This stock closed up 7.1% to $22.98 in Wednesday's trading session.

From a technical perspective, AMAG bounced sharply higher here right off its 200-day moving average of $21.24 with heavy upside volume. This move briefly pushed shares of AMAG above its 50-day moving average of $22.98, before it closed right at that level.

Traders should now look for long-biased trades in AMAG as long as it's trending above its 200-day at $21.24 and then once it sustains a move or close above Wednesday's high of $23.75 with volume that hits near or above 96,146 shares. If we get that move soon, then AMAG will set up to re-test or possibly take out its next major overhead resistance levels at $25.50 to its 52-week high at $27.

Kythera Biopharmaceuticals

Kythera Biopharmaceuticals (KYTH) is a clinical-stage biopharmaceutical company focused on the discovery, development and commercialization of novel prescription products for the aesthetic medicine market. This stock closed up 1.1% at $43.69 in Wednesday's trading session.

From a technical perspective, KYTH spiked modestly higher here right off some near-term support at $42.50 with above-average volume. This stock has been trending sideways and consolidating for the last month and change, with shares moving between $40.55 on the downside and $47.85 on the upside. Shares of KYTH are now starting to bounce higher off the lower-end of its recent range and move close to triggering a breakout trade above the upper-end. That breakout will hit if KYTH manages to clear some key near-term overhead resistance levels at $45.48 to its all-time high at $47.85 with high volume.

Traders should now look for long-biased trades in KYTH as long as it's trending above some key near-term support levels at $42.50 to $42, or $40.55 and then once it sustains a move or close above those breakout levels with volume that's near or above 192,843 shares. If that breakout hits soon, then KYTH will set up to enter new all-time high territory above $47.85, which is bullish technical price action. Some possible upside targets off that breakout are $55 to $57.

Tile Shop

Tile Shop (TTS) is a retailer of manufactured and natural stone tiles, setting and maintenance materials and related accessories. This stock closed up 3.6% to $24.05 in Wednesday's trading session.

From a technical perspective, TTS spiked higher here with above-average volume. This stock has been downtrending badly for the last month, with shares plunging from its high of $30.25 to its intraday low of $22.63. During that move, shares of TTS have been consistently making lower highs and lower lows, which is bearish technical price action. That said, shares of TTS could now be ready to see a short-term trend change that sends the stock higher.

Traders should now look for long-biased trades in TTS as long as it's trending above Wednesday's low of $22.63 and then once it sustains a move or close above its 200-day moving average of $24.25 with volume that hits near or above 310,585 shares. If we get that move soon, then TTS will set up to re-test or possibly take out its next major overhead resistance levels at $26 to its 50-day moving average at $26.69.

From a technical perspective, PNG rose modestly higher here right above its 50-day moving average of $22.39 with heavy upside volume. This stock has been uptrending strong for the last three months and change, with shares moving higher from its low of $20.17 to its recent high of $23.59. During that uptrend, shares of PNG have been making mostly higher lows and higher highs, which is bullish technical price action. That move has now pushed shares of PNG within range of triggering a near-term breakout trade. That trade will hit if PNG manages to take out some near-term overhead resistance at $23.38 to its 52-week high at $23.59 with high volume.

Traders should now look for long-biased trades in PNG as long as it's trending above its 50-day at $22.39 or above more support at $21.99 and then once it sustains a move or close above those breakout levels with volume that's near or above 313,445 shares. If that breakout hits soon, then PNG will set up to enter new 52-week-high territory, which is bullish technical price action. Some possible upside targets off that breakout are $26 to $30.

At the time of publication, author had no positions in stocks mentioned.

Roberto Pedone, based out of Delafield, Wis., is an independent trader who focuses on technical analysis for small- and large-cap stocks, options, futures, commodities and currencies. Roberto studied international business at the Milwaukee School of Engineering, and he spent a year overseas studying business in Lubeck, Germany. His work has appeared on financial outlets including CNBC.com and Forbes.com. You can follow Pedone on Twitter at www.twitter.com/zerosum24 or @zerosum24.